As individuals move between different roles they are likely to find themselves joining, and leaving, different pension schemes over time. This can lead to a lack of clarity as to how much an individual has saved for retirement, and even to pension pots being forgotten about or lost.
The idea behind pensions dashboards is that they will make it easier for people to interact with their pensions by allowing them to see information about all of their different pensions on a single online platform. It is hoped that this will help to reunite people with ‘lost’ pension pots as well as helping them to think about and plan for their retirement.
The Department for Work & Pensions (DWP) have launched a new consultation on pensions dashboards following previous feasibility studies and an earlier consultation on the design of the service. This new consultation looks at the design in more detail, and includes draft secondary legislation setting out the requirements to be met by pension dashboards and those providing them, as well as by trustees or managers of relevant pension schemes.
How will pensions dashboards work?
Pensions dashboards will be online platforms bringing together pension information from different sources, including occupational pensions, public sector pensions, stakeholder or private pensions and the State Pension.
Individuals who wish to view their pension information will submit a request to find their pension information via the dashboard. This ‘find request’ will then be sent to all of the pension schemes connected to the dashboards service, who will match the individual with any pensions they may hold.Individuals can then submit a ‘view request’ to see the data on any matched pension, which the dashboard will draw directly from the pension scheme.
It is envisaged that dashboards will be provided by approved third parties, but the Money and Pensions Service (MaPS) will also develop and host its own dashboard.
What will pension schemes need to do?
In order for pensions dashboards to work as planned, trustees or managers of pension schemes will be required to:
- connect to the digital architecture underpinning the dashboards service;
- receive ‘find requests’, undertake matching and register any found pensions in order to match individuals to their pensions; and
- receive and respond to ‘view requests’, making information available to individuals on the dashboard of their choosing.
These requirements will apply to all registrable occupational pension schemes with active and/or deferred members, including public service pension schemes. However, they will not apply to pensions which are already being paid, non-registerable schemes such us unapproved pension schemes and schemes outside the UK.
The Pensions Regulator will have compliance and enforcement powers where trustees or managers do not comply with these rules.
Although the draft legislation covered in the consultation only applies to occupational pension schemes, the Financial Conduct Authority (FCA) will make corresponding rules for providers of personal and stakeholder pension schemes. Similarly, although the consultation only covers England, Wales and Scotland, it is envisaged that Northern Ireland will introduce corresponding rules.
When will the rules apply?
The Government is committed to making State Pension data available on dashboards from day 1 of the scheme. Other pension schemes will be ‘on boarded’ into the dashboards service in a staged manner, based on size and deliverability.
The initial focus will be on large schemes between April 2023 and September 2024 and medium schemes between October 2024 and October 2025, with the approach to bringing in small and micro schemes to be determined at a later date.
What next?
The consultation closes on 13 March 2022. In the meantime, for those wanting to find out more about the pensions dashboards programme there are a number of resources available online including DWP webinars taking place throughout February.